Capital Requirements for Setting Up a PT PMA in Indonesia

Establishing a PT PMA in Indonesia is one of the most common ways for foreign investors to tap into the country’s growing economy. However, before launching a business, it’s crucial to understand the financial thresholds required by law. Meeting these capital requirements ensures your PT PMA is fully compliant and ready to operate.

What is a PT PMA?

A PT PMA (Penanaman Modal Asing) is a foreign-owned limited liability company in Indonesia. This legal structure allows foreign individuals or entities to engage in commercial activities across various sectors. To establish a PT PMA, you must meet specific legal, structural, and financial requirements regulated by the Indonesian Investment Coordinating Board (BKPM).

Capital Requirements for PT PMA

The Indonesian government sets clear capital thresholds for PT PMAs to ensure serious investment commitments:

Total investment plan must be at least IDR 10 billion (approximately USD 750,000), excluding land and buildings. This includes both capital expenditures and operational budgets.

Minimum issued and paid-up capital must also be IDR 10 billion, and:

Must be a real contribution from shareholders.
Can be in the form of cash or assets (but not land or buildings).
Should be fulfilled within three years in alignment with your business plan.

Factors Affecting Capital Requirements

Several factors can influence how much capital your PT PMA must allocate. These include the industry sector, business model, and operational scope. For instance, sectors like banking, insurance, mining, and large-scale manufacturing often demand higher capital due to their regulatory and operational complexity. Meanwhile, trading and consulting businesses may require lower capital but still need to meet the IDR 10 billion minimum.

Process for Meeting the Capital Requirements

Meeting the capital requirements involves a multi-step process that ensures your PT PMA is fully compliant with Indonesian regulations.

1. Choosing a PT PMA Structure

You must choose the right legal structure at the outset. A PT PMA must take the form of a limited liability company and requires at least two shareholders, one director, and one commissioner. These roles should be clearly defined in your company’s Articles of Association to avoid any legal complications.

2. Establishing a Bank Account

Next, open a local bank account under your company’s name. This account will receive the paid-up capital and serve as proof of fund availability. Authorities may request a capital statement letter or a bank reference to confirm the transfer.

3. Submitting Documents to BKPM

Once the capital is in place, submit your investment documents through the OSS (Online Single Submission) system. These documents include your capital statement, deed of establishment, business license application, and tax registration.

4. Complying with Regulations

After registration, your PT PMA must comply with investment activity reporting, tax obligations, and other operational requirements. Regular updates to the BKPM are necessary to maintain good standing.

Common Pitfalls and Challenges in Meeting Capital Requirements

Investors often face challenges when navigating these capital requirements. Common issues include overvaluing non-cash contributions, delaying capital injections beyond the three-year period, or submitting incomplete documentation.

Misunderstanding industry-specific capital regulations can also lead to rejected applications. To avoid these pitfalls, prepare a realistic business plan and consult with experienced legal professionals.

Get Expert Support from Seven Stones Indonesia

Setting up a PT PMA in Indonesia involves careful planning, accurate documentation, and a full understanding of legal obligations. At Seven Stones Indonesia, we specialize in helping foreign investors establish and manage PT PMAs with confidence.

Our team will guide you through each step of the process, from choosing a legal structure to meeting capital requirements. Contact us today to start your business journey in Indonesia with expert support and local insight.